Founder: The June output of live pigs dropped significantly, with prices stabilizing at the bottom. The industry's supply and demand situation is expected to gradually improve.

Founder released a research report stating that based on their analysis of the supply and demand situation in the pig farming industry, the current pig farming sector has gradually transitioned from the bottom of the cycle to a warming phase. Looking ahead, as losses intensify and drive the accelerated elimination of sow production capacity, the industry's supply and demand situation is expected to gradually improve, laying the foundation for a new price increase cycle in 2027. It is recommended to focus on large-scale leading enterprises with cost advantages and stable cash flow. Key points from Founder's analysis include: Slaughter volume: Overall slaughter volume of major listed pig companies in June continued to decline compared to the previous month. According to the June pig sales briefings of 14 major listed pig companies, a total of 14.05 million pigs were slaughtered in June, a month-on-month decrease of 5.6%. Among the companies that saw an increase in slaughter volume, Tecon Biology Co.Ltd (+51.8%), Jiangsu Lihua Foods Group (+22.2%), and Hunan Zhenghong Science And Technology Develop (+15.9%) showed higher increases; while Shenzhen Kingsino Technology (-36.1%), Shenzhen Kingkey Smart Agriculture Times (-29.3%), and Muyuan Foods Group (-9.5%) had the highest decreases. The report believes that the decline in slaughter volume of major listed pig companies in June is mainly due to alleviation of supply pressure leading to reduced numbers of slaughter-ready pigs. Year-on-year slaughter volume of major listed pig companies in June decreased by 12.7%. Among the 14 major listed pig companies, 6 saw a year-on-year increase in slaughter volume, with Tecon Biology Co. Ltd. (+64.4%), Jiangxi Zhengbang Technology (+40.0%), and Tech-bank Food (+33.1%) showing significant increases; while Hunan Zhenghong Science And Technology Develop (-61.5%), Leshan Giantstar Farming & Husbandry Corporation (-17.3%), and Wens Foodstuff Group (-14.5%) had the largest decreases. Taking into account the significant slaughter volume of Muyuan Foods Group, after excluding its impact, the remaining 13 major pig companies saw a year-on-year increase of +1.3% in June. Compared to 2025, cumulative slaughter volume of listed pig companies in the first half of 2026 decreased by 2.9% year-on-year, with an increase of 7.3% excluding Muyuan. The report attributes this to the gradual effectiveness of previous capacity control policies, adjustments in slaughter pace by leading companies, and the high base effect of the same period in 2025 leading to weakening momentum in industry-sustained growth of slaughter volume. Average slaughter weight The report calculated that the average slaughter weight of major pig companies in June decreased by 0.87% compared to the previous month. The average slaughter weight of major listed pig companies in June was approximately 124 kg per head, a decrease from the previous month. Among them, Zhejiang Huatong Meat Products saw a significant increase in average slaughter weight, while Tech-bank Food and Leshan Giantstar Farming & Husbandry Corporation saw significant decreases. The report believes that the decrease in average slaughter weight in June is mainly due to adjustments in the slaughter pace at the farming end during the price bottoming out and stabilization stage. Average selling price The average selling price of pigs from 13 major listed pig companies in June was 9.52 yuan/kg, a month-on-month increase of 1.77%. The report attributes the slight decrease in pig prices in June to the ongoing balancing stage of supply and demand: on the supply side, despite a slowdown in slaughter pace by listed pig companies in June after a concentrated slaughter period, the release of previously stocked large pigs and secondary fattening pigs continues, maintaining market supply pressure; on the demand side, weak summer consumption demand for pork due to sluggish terminal sales. With strong supply and weak demand, pig prices saw a slight decline compared to the previous month. Risk warnings: fluctuation in feed prices; environmental policy changes; risk of disease outbreaks; short-term price volatility due to increased slaughter pressure at the farming end.